State-run Bharat Heavy Electricals Ltd (BHEL) is looking to acquire a locomotive manufacturing facility in Europe. It has already submitted an expression of interest for its proposed buy.
“Yes, we are looking for an acquisition in Europe. We have already sent out our team to carry out due-diligence and evaluate the company. But we have to be the highest bidder to get that locomotive company,” K. Ravi Kumar, chairman and managing director, BHEL told Hindustan Times.
The European company manufactures electrical motive units or EMUs and prototype coaches and is up for sale because of financial ill health, Kumar said, but refused to divulge name and other details of the company.
“They manufacture prototype coaches and are somehow not doing well financially, we want to take over this company,” Kumar said.
BHEL has won an order for supply of 50 EMUs to Indian Railways. Three out of every four engines of Indian Railways come out from BHEL plant in Jhansi, the order will be completed in three years.
BHEL can produce locomotives up to 6,000-horse power, but is looking to get into 10,000-hp range, sensing demand from customers, Kumar said.
Foray into locomotive manufacturing is part of BHEL’s diversification plans. “We would now want 30 per cent of our business to come from non-core areas of which locomotive manufacturing will be an important component,” Kumar said.
The company clocked a turnover of Rs 21,608 crore in 2007-08.
The power sector giant is keen to form a joint venture with any of world-class locomotive manufacturers, including French train maker Alstom, German rail transit solutions firm Bombardier Transportation GmbH and a Japanese consortium comprising Itochu Corp, Mitsubishi Corp and Toshiba Corp for jointly supplying 1,000 railway locomotives for the Indian Railways.
“I have written to the heads of these companies and we are quite keen on an equity there. We would like to have 26 per cent equity in case we partner any of these companies,” Kumar said.